Dynamic Pricing Intended to Give Customers a New Cost Advantage

Dynamic Pricing Intended to Give Customers a New Cost Advantage

By Daniel Carr, Manager, Smart Grid Projects, PowerStream

An innovative pilot being run by PowerStream is providing participating customers with a dynamic new way of managing their electricity costs – one with the potential to provide significant savings to the grid and to customers. Participants are being given the information and tools they need to adjust their electricity consumption and costs in response to actual provincial electricity demand on a given day.

Supported in part by the Ontario Ministry of Energy’s Smart Grid Fund, and Energate Inc.’s Consumer Connected Demand Response platform, Advantage Power Pricing is a voluntary and dynamic pricing program for residential customers. Customers taking part in the pilot will pay a low price for off-peak energy use, while their peak use, from 3:00 – 9:00 p.m. on weekdays, will vary to one of three rates, based on actual provincial electricity demand. Prices will be finalized in mid-April but are estimated to be 5¢ for off-peak prices, and 10¢, 20¢ and 40¢ for the low, medium and high prices respectively. Customers will pay the lowest rate over 80% of the time.

Customers will be notified daily of the demand-based price that will apply during the next day’s peak period, and given the opportunity to shift their consumption away from higher-price periods to lower-price periods.

This shifting of consumption enables customers to better manage their electricity costs while at the same time helping to further reduce the strain on the province’s electricity grid. And it will do so in a more precise way than existing time-of-use pricing programs alone can achieve. If this program moves beyond the pilot stage and becomes available to a larger number of customers, it will help to reduce the need to build costly new power plants.

Customers who register in the program are equipped with an Energate Foundation™ Smart Thermostat and Home Energy Gateway, which give them access to up-to-date pricing information and then respond to price changes – intelligently, automatically and according to the customer’s preferences.

The thermostat can respond to price changes by increasing the temperature to which the house is cooled, and can even pre-cool the home to limit consumption during peak times. For customers with electric water heaters or pool pumps, load control switches can also control these appliances to further reduce electricity cost during peak times. The customer is always in charge of their energy consumption, and can even change settings and view consumption from anywhere through web and mobile applications.

“Participants in the Advantage Power Pricing pilot program are expected to save approximately 10 per cent on their electricity costs this summer,” says Martin Rovers, Director of Energy Solutions at PowerStream. “The program is also risk free, so customers are guaranteed to not pay more than if they were still on the existing time-of-use pricing plan.”

PowerStream is the first distribution company in Ontario to offer this innovative pricing plan to its customers. The project is intended to test out the customer appeal and electricity savings provided by the pricing plan in combination with new technology It is hoped that this pricing plan will later be made available to all PowerStream customers, and to customers of other distribution companies across Ontario. The pilot will wrap up later this year, with results published in early 2016. As of mid-March, PowerSteam was approaching its target to recruit 1,000 participants for the trial.

“The Government of Ontario is committed to providing electricity consumers with the tools they need to manage their electricity consumption,” said Energy Minister Bob Chiarelli at the time the project was announced. “The province-wide installation of smart meters has enabled great innovation in smart grid technology and we are excited to be taking this next step with PowerStream and Energate.”

PowerStream is a community-owned energy company providing power and related services to more than 370,000 customers residing or owning a business in communities located immediately north of Toronto and in Central Ontario.